Tuesday, August 16, 2011

Copyright Recapture: How to (Legally) Break Your Publishing Contract

A Fleeting Chance to Terminate Publishing & Entertainment Contracts

They say that with every  contract, the truth is in the details.  But, that is not absolutely true when it comes to entertainment and publishing contracts.  Most publishing contracts contain a clause that states the contract term is in perpetuity. Unhappy authors should not be discouraged by what they read in their contracts.  The in perpetuity clause is merely intended to discourage beneficiaries of the Copyright Act's termination provision from exercising their inalienable right to recover their copyrights.  This undervalued termination right trumps written agreements -- even agreements that expressly state they are for the "the life of the copyright, including any renewals or extensions."  Also known as “termination” or “recapture” rights, the time is ripe to send termination notices for entertainment and publishing contracts signed between 1978 and 1989. 

Due to an esoteric provision found in the Copyright Act that gives individual authors the “option” to terminate book contracts, most life of copyright contracts can be terminated.  Congress embedded in the Copyright Act a “reset button” for every post-1977 contract, which, when activated 35 years after initial publication, returns ownership and control of the copyright to the author or author’s heirs. 

Alert!  The time is ripe to send termination notices for contracts signed between 1978 1989

Termination Rights Trump Life of Copyright Contracts

To protect authors of older works from having to live with a bad deal they entered into when they had little negotiating skill or leverage, the Copyright Act allows authors (and their heirs) to recapture copyrights by sending notices of termination to their publisher partners. This often overlooked, but powerful right, serves as an “insurance policy” for authors who signed away their rights for less than adequate compensation. 

Section 203 of the “new” Copyright Act applies to grants of copyrights signed on or after January 1, 1978 by the author -- not grants signed by an author's heirs. As long as the work being terminated is not a “work made for hire,” the right of termination cannot be waived -- even if there are contractual provisions to the contrary.   In short, copyright law trumps contract law.  One of the idiosyncrasies of the termination right, is that it does not apply to foreign grants.  However, under UK law, heirs can recapture rights twenty-five years after the death of an author.  Known as British Reversionary Rights (BRR), these rights are analogous to our recapture and termination rights.

Alert! If you are an author, estate adminstrator or trustee, be very careful of what you are asked to sign by agents, publishers, producers and other copyright licensees. If you sign a new agreement for the same rights, you may have nothing left to terminate. Consult a copyright attorney. The opportunity to break an entertainment or publishing contract comes around just once every 35 years. If what you sign is determined to revoke and re-grant of rights, you (or your agent) may have exhausted your right to terminate, or negotiate significantly better financial terms. 
This lucrative right of termination does not concern itself with when the work was registered; it only concerns itself with when the work was published, or the contract signed.   Succinctly stated, “Termination may be exercised at any time during a period of five years beginning at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever is earlier.” 

Countdown to Copyright Termination (for books, songwriter and recording agreements) 

The Copyright Act and the administrative rules that apply to termination and recapture of copyrights are dense and unforgiving.  Some might call them hellish.  For example, if you serve your Notice of Termination late, it is considered a fatal mistake under the law.  And, the process is not considered complete until the Notice of Termination has been recorded with the Copyright Office, which must be prior to the date of termination.  You can serve a Notice of Termination as early as ten years before the effective date of recapture, or as late as two years before the effective date of recapture.  The author (or his heirs) selects the date termination will take effect, and must send a Notice of Termination within the termination window outlined in the Copyright Act.

Example 1:  If a novel was published in 1979, rights could be recaptured as early 2014, i.e., 35-years after the date of initial publication.  In this instance, the earliest the author (or his heirs) could have served a Notice of Termination would have been 2004, i.e., ten years before the recapture date.  And, the latest a notice of termination can be sent is 2012 -- two years before the effective termination date. 

Like the deed to a house, a Notice of Termination filed with the Copyright Act becomes – if not challenged -- part of the work's chain of title. If anyone were to review the Copyright Office’s database, the author or composer's name will show up in the "notice of termination” document. 

Use It or Lose It

Calculating the notice and recapture dates are the author or composer's sole responsibility.  The Copyright Office cannot draft Notices of Termination, or calculate the notice and recapture dates for you.  Therefore, it is strongly advised that you consult with a knowledgeable copyright attorney.  Many advisers who are not well-versed in copyright law may not be aware of this right.  Reliance on such advisers, whether a trusts and estate attorney or literary agent, can result in an n author or estate foregoing the possibility of recovering their rights.    

Getting Back Rights to Pre-1978 Works

Keep in mind that the Copyright Act also provides an inalienable right to terminate pre-1978 works.  Over time, Congress increased the term of copyright protection from 56 years to 75 years.  In 1978 Congress amended the Copyright Acts again, extending the renewal term to a full 95 years.  It also provided estates with an inalienable right to recover those extended copyright terms.  This subset of the Copyright Act provides for termination at any time during the five year period beginning at the end of 56 and 75 years from the date the copyright was originally secured. 

Similarly, if the author of a pre-1978 work died during the initial 28-year term of copyright, that author's estate has the right to reclaim the renewal copyright.   The bargaining power which is conferred by this right is not to be underestimated.  In this instance, what is at stake is the balance of the remaining copyright term or 67-years.

What is extraordinary about this right is that it also trumps a writer or composer's will.  This added opportunities to get back ownership of copyrights exists even if the author devised his copyright to someone other than a family member, or cut an individual family member of a will.   

Example 2.  Miles Davis, the jazz icon, died in 1991, before the end of the 28th year of copyright of his revolutionary 1970-album Bitches Brew.  Because he died before the 28th year of copyright, his renewal term rights in the song Bitches Brew vested automatically in his four statutory successors -- two of whom were not mentioned in his will.   It also severed ties to his music publisher.  Today, his three sons (two of whom were not included in their father's will) and his daughter, jointly control the remaining 67-years of copyright in Bitches Brew and other songs.   Here, the Copyright Act rewrote both Miles Davis' will and his songwriter agreements.   

Similarly, in 1938 Jerry Siegel and Joe Schuster, two young men from Cleveland, Ohio, signed over all of their rights to the Superman character to DC Comics for $130.00 and vague promises of future work. To address this, and similar economic injustices, Congress gave authors (and their heirs) a second chance to strike better financial deals. As a result, starting in 1999, using Section 302 of the Copyright Act, Siegel’s heirs recaptured his rights to the Superman character. Fortunately, you don’t have to be related to a man of steel to reclaim copyrights. The heirs of Hank Williams, William Saroyan, Truman Capote, Joe Young, Lorenz Hart, and many others have availed themselves of these valuable rights.
Heirs be Aware!

While the Copyright Act was designed to provide for authors and their families, it is not in the interest of publishers or record labels to educate you about termination rights.  Further, be very wary of what you are asked to sign.  It is easy to inadvertently waive these powerful rights. The important message is, when an artist or creator dies, their family has the right to recover their copyrights.  To quote the Copyright Act, "Termination of the grant may be effected notwithstanding any agreement to the contrary...."  

Freedom from entertainment and publishing contracts, which in retrospect, seem unfair, must be won.  While most termination cases we see do not require litigation, skill and perseverance is required.


If you are thinking about exercising your termination rights, or need assistance renegotiating your entertainment or publishing agreement, call us.  We can help you: (i) identify which copyrights are eligible for termination; (ii) determine who is the proper party to exercise those termination rights; (iii) prepare and record your Notices of Termination; (iv) assist you recover rights to copyrighted works you thought were irrevocably assigned or bequeathed to others; (v) help you renegotiate your existing contract; or (vi) work cooperatively with your trusts and estates attorney on reopening an estate, or seeking copyright damages that flow from a determination of ownership or co-ownership of a recaptured copyright.  

NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.   

The Best 1978*

Select Backlist Books

1.  The Stand - Stephen King
2.  Eye of the Needle - Ken Follett
3.  The House of God - Samuel Shem
4.  The Far Pavilions - M.M. Kaye
5.  Holcroft Covenant - Robert Ludlum
6.  Chesapeake - James Michener

  Select Songs (artist , not composer shown)

1. Is This Love - Bob Marley
2. Le Freak - Chic
My Life - Billy Joel
4. Life's Been Good - Joe Walsh
5. Night Fever - The Bee Gees
6. Miss You - The Rolling Stones
7. YMCA - The Village People

*For a work published on January 1, 1978 the latest the termination notice can go out is January 1, 2016 

LLOYD J. JASSIN is a New York-based publishing and entertainment attorney with a special interest in copyright and trademark matters. He is co-author of The Copyright Permission and Libel Handbook: A Step-by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons, Inc.).   He has written extensively on negotiating contracts in the publishing and entertainment industries. He may reached at Jassin@copylaw.com or at (212) 354-4442. His offices are located at 1501 Broadway, Floor 12, New York, NY 10036. 

(c) 2011 - 2017. Lloyd J. Jassin